Lafite 2008 Continues its Ascent

From Decanter:

Carruades de Lafite set to overtake first growths?

September 17, 2009

by Jane Anson in Bordeaux

Lafite 2008 is currently trading at around 3,800 pounds per case, rising in price by around 90 pounds per week, even though it is not due to bottled until next year.

Margaux 2008, in contrast, is trading at just over £2000.

Carruades 2008 is still at around £1,000, but it is predicted to keep climbing closer to the other first growths once in bottle.

Gary Boom, managing director of Bordeaux Index, told decanter.com, ‘Today a case of Carruades 2004 would set you back £1800, which is considerably more than the 1650 pounds you would pay for a case of Mouton 2004.

‘And this for a wine that cost around 280 pounds at initial release. The 2008 may not climb as high as the firsts, but it is likely to go higher than Cos and the other Super Seconds.’

The September Liv-ex report also looks at the phenomenon of the ’seemingly unstoppable Brand Lafite’, reporting that Carraudes has bucked the trend of price drops during the financial crisis, and that on average, recent vintages are now 22% more expensive than they were at the peak of the market in June last year.

‘Asia has made up its mind on this brand,’ said Boom, ‘and completely ignores either vintage effect, or Parker scores.’

The other second wines are trading at a third to a quarter of the price of Carruades, and even the other Firsts, apart from Lafite, are very much score-led in terms of the price.

‘And I’m not sure this will slow down – before the wine is bottled, trading takes place in Europe, but once in bottle, it heads over to Asia, and then goes out of circulation, so pushing the price even higher.’

The huge cachet of the Lafite – and Rothschild – brands is one of the reasons for the success of the wine. Added to that, the label of Carruades is so similar to that of the first wine as to be indistinguishable, especially to an Asian audience.

Boom added that ‘Mouton will be next [to conquer the Asian market], as it also has the Rothschild name attached.’

I’d like to point out though, sadly, the investor rarely – if ever – sees 100% of the gains. It is divided up amongst the various middlemen, say the broker, the auction house, or if through private sale, the retailer/client. Still, it’s exciting to see the gross return triple in the lifespan of the investment. And while its ascent may not be as thrilling as that of certain stocks (think LVS from its $1 nadir in March to its current value of near $20), it is definitely less of a heart-stopping ride.